Ship operating costs down again in 2015

Total annual operating costs in the shipping industry fell by an average of 2.4% in 2015, according to OpCost 2016, Moore Stephens’ unique ship operating costs benchmarking tool.

This compares with the 0.8% average fall in costs recorded for 2014. All categories of expenditure in 2015 were down on those for the previous 12 month period.

Total operating costs for the tanker, bulker and container ship sectors were down in 2015, the financial year covered by the study. On a year-on-year basis, the tanker index was down by 4 points, or 2.2%, while the bulker index fell by 6 points, or 3.6%. The container ship index was also down by 6 points, or 3.7%. The corresponding figures in last year’s OpCost study showed falls of 2 points in both the tanker and container ship index, and of 1 point in the bulker index.

There was a 1.2% overall average fall in 2015 crew costs, compared to the 2014 figure. Tankers overall experienced a fall in crew costs of 1.3% on average, compared to the 0.4% fall recorded in 2014. Crew costs were also down for bulkers and for container ships, by 1.1% and 3.3% respectively.

Expenditure on stores was down by 4.3% overall, compared to the fall of 2.4% in 2014, while there was an overall fall in repairs and maintenance costs of 4.3%, compared to the 0.6% reduction recorded for 2014. The overall drop in costs of 3.2% recorded for insurance, meanwhile, compared to the 0.4% fall recorded for 2014.

This is the fourth successive year-on-year reduction in overall ship operating costs.

The reduction is three times that recorded 12 months ago, and had not been widely anticipated. It is likely to be due in part to continuing good husbandry in a difficult operating environment, and partly to an extremely difficult market and wider economic climate.

The shipping sector can draw some comfort from a fourth successive annual fall in operating costs. But it should remember that costs can move both ways. However, inflationary pressures on operating costs will remain. To be competitive, ship owners will need to continue to improve efficiency, innovate with new technology and harness the considerable benefits of ‘big’ data without delay.